Micro Finance on the Internet

This is a copy of the article that Chris Chaplow wrote for the May 2009 edition of the Essential Magazine after discovering Kiva on the internet. 

Adbugani Ergashboev is 48 years old and lives with his wife and three children in the town of Khujand in Tajikistan. Abdugani is an animal farmer. He owns cows and, with the help of his wife and children, sells their milk. In order to further develop his business, Abdugani wants to take out a loan and buy one or two more cows and feed for them. After fattening them up, he will be able to sell them for a more favourable price. Then Abdugani will be able to increase his business and use some of the profits for the wedding of his elder son. He is asking for a loan of $800 for this purpose. He will repay the loan in 5 months.

I only know about Abdugani because as recently I came across a “Google Public Service Advert”. This  led me to a website called which I found very powerful and inspiring.

Kiva’s tag line is “Loans that save lives” and it enables people like you and I to lend small amounts of money to an entrepreneur, in the developing-world for a specific project.

Other examples on  are:
Saida Azimova is 19 years old, she lives with her parents in Tajikistan. Two years ago her father bought an old sewing machine for her and since then she has been providing tailoring services from her house to the village. She is looking for $500 to buy a better machine.
Grace Poni from the Sudan is currently in the business of selling cosmetics in a shop and is requesting a $900 loan to expand her stock.
Mrs. Kimleng Sun is 38 years old and lives in Cambodia and sells sugar cane juice and raises pigs, earning about US $3.00 per day. Her husband, Mr. Ok Kosal, 30 years old, sells ice cream door to door, and also distills alcohol at home, earning US $3.00 per day. Mrs. Kimleng decided to request a loan US $500 to purchase a new motorcycle for her husband’s business and to also purchase five pigs to breed.
Thousands of people mainly in the USA and Europe have signed up to individually lend to the entrepreneurs all over the world. What is striking is that the individual loans are all small amounts, starting from $25. Even in these difficult times we can all still make a difference. How does all this work?

Lenders browse profiles of entrepreneurs in need, and choose someone to lend to. When they lend, using PayPal or their credit cards, Kiva collects the funds and then passes them along to a micro-finance partner who distributes the loan funds to the selected entrepreneur. Often, the partners also provide training and other assistance to maximize the entrepreneur’s chances of success.

Over time, usually six months to a year, the entrepreneur repays their loan. Repayment schedules and other updates are posted on Kiva and emailed to lenders who wish to receive them. Lenders do not charge any interest. When lenders get their money back, they can re-lend to someone else in need, donate their funds to Kiva (to cover operational expenses), or withdraw their funds.

Clearly this would not be possible without the internet of Micro-finance partners. In case you had not heard of it Microfinance is the supply of loans, savings. And other basic financial services to the poor.

Kiva, a San Francisco based non profit organization was founded in October 2005 by Matt and Jessica Flannery. The couple’s initial interest in microfinance was inspired by a 2003 lecture given by Grameen Bank founder Muhammad Yanus at Stanford Business School.

Now it has many prestigious supporters. PayPal provides free payment processing enabling 100% of the loaned funds to reach entrepreneurs around the globe. YouTube has donated 120 million free banner placements. Kiva is a Google Grants recipient, receiving free advertising and attracting new lenders. Microsoft has funded research and development of Kiva’s Field Partner facing software.

Kiva is a 2006 MySpace Impact Awards Nominee in the category of Poverty Relief. This formal recognition of Kiva in the social networking sphere recognising the common goal of “connecting people”.

The web is an amazing tool for creating personal connections, and by applying that concept to poverty. It goes further. The lenders are being connected in as their profiles are (optionally) on Kiva as well. Although many are anonymous others are active in the forum and many have formed teams with business colleagues, social groups or common interest groups for even greater impact.

Inspired by writing this article Chris Chaplow founder of has created the Kiva team and donated €5000 of advertising to KIVA. Sign up and join the team at    or